A volatile market

Fuel is among the largest expenses that a commercial driver will incur in their day-to-day operations.

Every trucking business will be affected by the price of fuel.

And there’s no doubt 2022 has affected your business, in terms of fuel expenses, more than anyone could have predicted.

On March 12, the highest retail price per gallon ($5.135) in more than a decade was recorded, according to AAA. The previous highest recorded retail average for U.S. diesel was $4.845 on July 17, 2008.

We’re all paying more at the pump, but how are truckers whose livelihood depends on the purchase of fuel dealing with all of this?

What drivers are saying

Ryan Darling, an OOIDA member from Delaware, Ohio, operates one truck through Ryan Express LLC.

“Because you have to wait 35-40 days, you have to operate with the cash you have on hand,” Darling said. “If you’re operating on revenue from two or three months ago, and fuel prices have gone up $1 per gallon, it really takes away your operating capital, and that gets a little sketchy.”

Darling said he utilizes a fuel surcharge, built into his carrier agreement, with his regular customer.

“If they don’t want to do that, then I’m not going to haul just to haul,” Darling said. “I’ve got to be profitable. I have it figured out where my baseline is, and I have an idea of how much I want to make. If it’s more profitable to just sit than to take something, that’s what we have to do.”

Clay Souder is a fleet owner with Clay Souder Trucking Inc. in Mountain City, Tenn. He says even if you’re able to afford higher fuel prices, there’s a trickle-down effect that everyone has to deal with.

“Overall, as long as the markets and rates adjust accordingly, we’re not losing anything,” Souder said. “But, it’s still an increase, which trickles down to consumers, who have to pay extra for gas, extra for groceries, and more at restaurants.”

Credit limits are an area where Souder has seen a direct impact.

“You used to be able to fill your truck up for $700. Now you’re spending $1,000, and your truck’s not even full,” he said.

One adjustment Souder’s company has made is being more aware of where fuel purchases are made.

“I might need fuel now, but depending on the price, going down the road to find a price that is 10 cents cheaper per gallon might be worth it,” Souder said. “The overall cost balances out as you’re getting the maximum rate. You have to be pickier about the load you’re hauling.”

Location also factors heavily into these decisions, Souder said.

“You pay attention to where you’re going,” he said. “If you’re going to the Northeast, where fuel is $1 more per gallon than the Southeast – or going to California or the Northwest – you make sure you’re getting enough money to cover the cost of going to that area.”

Professional advice

The latest education from the OOIDA Foundation encourages the use of fuel surcharges to ensure your business keeps up with the volatility of the market.

This education not only includes a fuel surcharge calculator, but also real world examples to help you figure your rate as well as templates for addressing a surcharge with customers new and old. There’s also information about fuel cards.

For the latest education from the OOIDA Foundation regarding fuel surcharges and more, visit OOIDA.com/Foundation. LL